Most service members will see no change in the amount they receive, said Army Col. Steve Westbrook, director of DoD's Per Diem, Travel and Transportation Allowance Committee. "We will still be paying people overseas what their housing expenses are," he said.

Westbrook said members' basic allowances for quarters and overseas housing allowances are being rolled into one entry on leave and earnings statements. The total monthly payment will appear on statements as "OHA" -- overseas housing allowance, he said.

Under the current overseas system, a member's total housing compensation is computed using the amount the member pays for rent, not exceeding a rent ceiling, plus a fixed locality-based utility allowance. The amount is then split into two parts on pay statements -- the member's basic quarters allowance (a fixed amount based on rank and family status) and any difference, paid as overseas housing allowance.

What's happening, Westbrook said, is similar to the Jan. 1, 1998, merger of stateside basic and variable housing allowances. DoD changed the way stateside housing allowances are computed because the basic allowance for quarters was tied to cost-of- living raises and not keeping up with members' actual housing expenses.

"We're trying to design a housing compensation system flexible enough to make up for the difference [in housing costs overseas] -- whatever it takes to get people into adequate housing overseas," Westbrook said.

Because adequate housing overseas is sometimes hard to find, he said, the overseas allowance system helps ensure service members can obtain quality housing without incurring out-of-pocket costs. Rental ceilings, based on members' ranks, family status and locale, are based on actual rents reported to finance centers. Overseas housing allowances are updated biweekly based on reviews of cost data and currency fluctuations, he said.

The overseas housing system is set up to pay service members exactly what they pay for housing and utilities -- no more, no less --but it doesn't always work that way, Westbrook said. Some members overseas net a little extra in their paychecks because their fixed basic quarters allowance is more than their rent.

Those now pocketing the extra will be grandfathered for the remainder of their current rental agreements or their tours, whichever comes first, he said. The exception was made for fairness: "They made a conscious housing decision [but it was] based on the rules [at the time]," he noted.

Service members who enter rental arrangements after Jan. 1, however, receive only their actual rent plus a utilities allowance.

"We're trying to get people into adequate housing, not give them a monetary incentive to live in cheap housing," Westbrook said."